The Saudi Real Estate Refinance Company (SRC), a mortgage financier wholly owned by the kingdom’s Public Investment Fund, has signed an agreement with Alinma Bank to acquire one of its property financing portfolios as it seeks to boost the home finance market in the Arab world’s biggest economy.
The agreement completes the "onboarding" of all mortgage providers in the kingdom by the SRC, it said on Friday.
The SRC has acquired refinancing assets worth more than 20 billion Saudi riyals ($5.33bn) through partnerships with major banks and mortgage providers.
“As part of our ongoing drive to support Vision 2030 goals, we continue our focus on enabling ... secondary mortgage market with the necessary liquidity to accelerate the delivery of affordable home ownership objectives,” said SRC chief executive Fabrice Susini.
“We are working closely with our partners to achieve these goals by providing them with the capital and risk management solutions which are essential to their ability to, in turn, offer more access to affordable home financing solutions that meet the different needs of Saudi citizens, particularly during changing market conditions.”
Saudi Arabia has set an ambitious target of raising home ownership rates in the kingdom to 70 per cent by 2030 under the Sakani programme — a joint initiative between the Ministry of Housing and the Real Estate Development Fund.
The fund distributes land plots and arranges home loans for Saudi citizens seeking to build homes.
The deal “contributes significantly to accelerating the sector’s collective drive to deliver on Vision [2030’s] 70 per cent home ownership in the kingdom”, Mr Susini said.
Home ownership rate in the kingdom continues to rise amid support from the government to its citizens.
According to the Ministry of Housing, home ownership rate rose to 60 per cent, from 47 per cent in the last four years, with the target exceeding by more than 8 per cent during the period.
The SRC, cofounded by the kingdom’s PIF and the Ministry of Housing in October 2017, does not lend directly to end users but provides liquidity to the home loans market by buying mortgages from banks and other lenders, freeing them up to extend more loans to the sector.